"Inflation came out of nowhere.”

herbalplants

Interesting times ahead.

https://davidmcwilliams.ie/central-bankers-have-become-celebrities-and-they-understand-less-than-we-thought-they-did/

Jmc25

The idea of less independence for central banks is interesting and would mark a huge shift from the orthodoxy of the past forty years.

Maybe in the US/UK/countries with their own central banks, we might see some moves to wrestle independence from the central bankers. But I don't see how that can happen in the EU without serious tensions between member states - eg if Germany wants high rates to kill inflation and that but Italy needs to keep them low because of their high government debt (as is already the case), I don't see how there could ever be a political consensus there and would likely put huge pressure on the viability of the eurozone itself.

Q&A

To say central banks are not omnipotent isn't exactly news. Nor is it news to report that rate increases are blunt instruments.

I don't see how more or less central bank independence changes how they deal with issues. They print money and set rates. That's all they can do. These tools work for some problems and don't for others.

There was always going to be a trade off between between QE in trying to stave off deflation a decade ago and the impact of all that money would eventually have on prices now.

A central banks job is to try and smooth out growth. Slow and steady rather than dramatic highs and lows. Less independence means more populist policies. Are boomier booms and bigger busts really a good outcome?

jimmybobbyschweiz

One of the biggest drivers of QE has been the US Fed, which has its QE policy driven by the NY Fed, which is made up of the heads of Wall Street banks. There is already no independence of the Fed at least and look at the disaster that has been created with low for too long rates mixed with ginormous QE. Policy has not been geared for the good of society as a whole, which is why we have the greatest inequality in Western economies in a long time, at a time when apparently the West has never been wealthier. We are also seeing the older generations plunder the wealth of younger generations in one of the greatest scams of all time; the propping up of the asset bubble. Instead of having a thousand millionaires, we have one billionaire; instead of having lots of independent businesses, we end up with the same chains on every street and in every town centre; all propped up by their ability to suck on the teets of the QE capital market cow.

The moral of the story is that the game is rigged and central bankers do not work for the common man, as they are not influenced and made up of the representatives of the common man. Therefore, as they say in respect of Vegas Casinos; ultimately the house (being the vested interests) always wins (at the expense of the common man).

L1011

A link and no commentary is not a valid basis for a post, let alone a thread.

You've had threads closed for this before. If you do this again you will start receiving moderation points for it